New Orleans Mayor LaToya Cantrell on Tuesday (Oct. 1) presented her proposed $1.78 billion 2025 budget to the New Orleans City Council this morning.
Next year will be the final city budget that Cantrell, who is nearing the end of her second term and cannot run again, will implement as mayor, though her administration will write the 2026 budget before leaving office.
“When I think of the overall six and a half years that I’ve served the city of New Orleans, collectively, with members of the council both old and new, I’m reminded of all that we’ve gone through together,” Cantrell said, pointing to the Hard Rock hotel collapse, a cyberattack on the city systems and the Covid-19 pandemic, among other significant challenges.
Cantrell, who appeared before the council with her top deputy, Chief Administrative Officer Gilbert Montaño, presented the proposed budget as a culmination of a three-year plan to stabilize city finances following the onset of the Covid-19 pandemic in 2020.
The goal, Montaño said, was to return city operations to their pre-Covid levels and establish a reserve fund of over $100 million for emergencies.
“We’ve had the ebbs and flows of a significant amount of one-time money; we’ve had the ebbs and flows of significant revenue loss, and now we’re stabilizing,” Montaño said. “So really what is most important now and for the future years is some level of constraint with modest strategic fiscal growth. And that’s ultimately what we did.”
The proposed 2025 budget includes cuts to most departments, including EMS, the New Orleans Police Department and the City Planning Commission, in a move that the administration says is “right-sizing” departmental budgets.
While the overall budget is $1.78 billion, the general fund budget — which is made up of recurring revenues like local taxes and fees and pays for day-to-day departmental operations — is $816 million. That includes $776 million in regular revenues and $40 million from a city reserve fund.
“There was approximately $900 million of asks from our department – and I won’t even say asks, needs, legitimate and vital needs from our departments,” Montaño said. “As you know, at our revenue estimating conference, we collectively agreed that $776 million would be the baseline revenue.”
The administration highlighted five priorities in its budget presentation: public safety and public health, infrastructure, quality of life, good government and local economy growth.
The city also plans to raise pay for all of its employees by 2.5%, the final part of a three-year plan to raise pay by 10% in order to increase retention and reduce vacancies across city agencies.
“This budget ensures essential funding for high-quality services, prioritizes significant investments in our employees, and provides increased funding for agencies like Public Works, Property Management, Health and Homeless Services,” Montaño said, reading off a PowerPoint slide.
Montaño also discussed how the city plans to spend its remaining federal American Rescue Plan Act dollars. The city has committed 91% of approximately $387 million in pandemic relief aid but still needs to obligate the remaining 9% of funds – about $35 million – by the end of this year and spend them by the end of 2026.
The budget presentation highlighted substantial federal funding for workforce development, green space improvements, improvements to the city’s low-barrier shelter and overhauling the criminal justice system’s technology.
However, some present at the meeting raised concerns over how the city was allocating its budget.
Deja Jones, a youth development specialist with the New Orleans Youth Planning Board, said that the budget appeared to be the “same old, same old.” She questioned whether the city is allocating enough funds to young people outside of what they are putting toward the criminal justice system.
“I do hear at least a little bit of a willingness or openness to look at other solutions to supporting young people and their families,” Jones said. “So, hopefully, today, we are able to advocate exactly for that, so that our voices are heard and then the funding dollars get allocated accordingly to those needs.”
Nellie Catzen, the executive director of the Committee for a Better New Orleans, said that she wished the budget process had been more equitable and engaged city residents more.
Cantrell hosted one budget town hall at the end of August, but it operated more as a victory lap for her time as mayor – highlighting key achievements – as opposed to an opportunity to solicit feedback on how the city might allocate its funding.
But on Tuesday, Cantrell appeared before the council with a cloud hanging over her head. Cantrell’s administration has been the subject of a federal investigation that has now stretched for two years, according to reporting by The Times-Picayune.
Last week, Randy Farrell, the owner of a building inspection firm, was charged in a federal indictment with providing Cantrell with thousands of dollars in gifts as part of a scheme to convince her to fire an official in the Department of Safety & Permits.
Cantrell has not been charged with a crime, but did briefly address the scandal at Tuesday’s meeting. She said that though she has faced repeated accusations of wrongdoing throughout her tenure, she has demonstrated a “track record of delivering results” for the city.
The City Council will now host budget hearings throughout October and November. Each week, there will be departmental budget hearings that residents can attend. The council plans to vote on the final budget at its Nov. 21 meeting. By law, the council must vote on a final budget by Dec. 1.
John Gray contributed to this story.